Storm water fee creating flood of concerns

A new storm water fee is hitting Jackson businesses in their wallets. Consider Jackson Truck Service, which will hand over more than $6,700 this year.

“I think it’s creative financing on the city’s part — and legal extortion,” said Fred Fischmeister, the company’s vice president.

However, city officials say they cannot continue to raid their street fund to sweep streets, pick up leaves and keep the Grand River clean.

And they say the storm water fee, which is expected to generate about $800,000 per year, is the most equitable way for the city to cover the cost of complying with storm water regulations because all property owners pay it.

“This is a service required by the federal government,” Councilman Daniel Greer said. “There should be a fee.”

Who should pay?

Jackson is the ninth Michigan community to establish a storm water utility. Ann Arbor was the first in 1983.

“It has been a godsend,” said Craig Hupy, Ann Arbor’s field operations manager and systems planning manager.

“It gives us a steady stream of revenue for storm water maintenance,” Hupy said, “and we have been able to do long-range planning because we know from year to year what kind of revenue we’re going to be generating.”

Ann Arbor’s fee for home owners ranges from $12.59 to $66.12 per quarter. Jackson has a flat rate for home owners of $8 per quarter.

Consultant Vic Cooperwasser, senior project manager of Tetra Tech of Ann Arbor, said Jackson bills other property owners, including businesses, schools, governments, churches and nonprofit organizations, based on how much storm water their property absorbs and how much runs off.

“It’s a much fairer way to raise revenue,” Cooperwasser said. “Compared to the national average it’s very reasonable.”

But some business owners question what they get for their money.

Phil Wrzesinski, president of the Toy House and vice president of Jackson Local First, said the city is losing revenue because it is losing residents and businesses, and it’s wrong for the City Council to make up for it by imposing a new fee.

“They can argue about federal regulations and reporting costs. They can argue about fairness, how everyone has to pay. They can argue about how this will free up money for other projects like road repair,” Wrzesinski wrote in an email.

“But at the end of the day, those of us who have not fled the city are now paying more for the same services we have always received.”

The Toy House, 400 N. Mechanic St., has a storm water fee of $109 per month. Jackson Truck Service, 1183 Lewis St., has a fee of $560 per month.

Since both businesses are along the Grand River and their storm water drains directly into it, Wrzesinski and Fischmeister said they should be exempt from the fee.

“There are no storm sewers that service my property,” Fischmeister said. “The city is not doing anything for me.”

But Public Works Director Jon Dowling said they are still required to pay the fee because storm water from their property still goes into the river and affects its quality.

A legal battle?

Before Jackson, the last Michigan city to impose a storm water fee was Lansing in 1995.

But a citizen, Alexander Bolt, took the city to court over the fee and in 1998 the Michigan Supreme Court determined it was a tax, not a fee, and ruled it unconstitutional because it was not put to a vote of the people.

Fischmeister and David Klein, one of the owners of Klein Brothers, said Jackson’s fee has a lot in common with Lansing’s.

“They never gave us a chance to vote,” Klein said. “They went around it a different way.”

Fischmeister and Klein said the City Council should repeal the ordinance that set the fee. They also have been talking to other business owners about mounting their own legal challenge.

The Michigan Supreme Court’s decision on Lansing’s fee distinguished between taxes, which are compulsory, and user fees, which are voluntary.

Dowling, who was an assistant engineer in Lansing when its fee was imposed, said Jackson’s fee is voluntary because property owners can get green infrastructure tax credits to lower it.

Homeowners can reduce their fee 25 percent and other property owners can reduce their fee up to 50 percent by using rain barrels, rain gardens, landscaping, storage tanks and detention ponds to divert storm water.

Cooperwasser said Jackson’s fee is based on the court’s guidelines. He said the court’s decision was about whether Lansing’s fee was valid, not whether storm water utilities are legal.

“The proof is that eight others in Michigan have been operating just fine since the Bolt decision,” Cooperwasser said.

Councilman Carl Breeding, who voted against the fee, maintains it is a tax because property owners have to pay more for a service.

“It looks like the city is just trying to get money,” Breeding said.

Greer said the city could have done a better job of explaining the need for the fee and tried to be fair to businesses. But he said the city should not give in to the threat of court action.